Did you know that China is the only major economy in the world to report GDP growth for 2020?
Amidst the global health crisis, domestic extravagant consumption soared in the world’s second-largest economy as luxury retail businesses increasingly embrace “New Retail”, a business model coined by Alibaba founder Jack Ma where a business takes customer experience to the next level by converging offline and digital experiences.
Younger generations are now the top consumers, making this revolution in customer journey and experience effective. We all know Millennials and Generation Z greatly rely on online stores to acquire their personal needs and maintain their high-end lifestyles. This alongside Consumer Repatriation of high net-worth individuals and the country’s middle class fuelled the boom.
Astute property developers hastily capitalised on this great consumer demand with others already expanding their presence in the market. Let’s take a look at the five key players behind the success of China’s luxury retail industry.
1. Swire Properties
This world-class company has reported an increase of 169.6 per cent and 171 per cent year-on-year during this year’s first quarter with the popularity of the shopping mall Taikoo Hui in Guangzhou and mixed-use facility HKRI Taikoo Hui in Shanghai. High net-worth individuals flock in the vicinity like swarming bees with the flawless combination of real estate and residential buildings around the area.
Setting aside the figures, the company successfully built a legacy brand by creating inviting spaces that allow consumers to embrace their elevated lifestyles and local culture.
2. Beijing Hualian Group
The pandemic was tough but through resilience, flexibility, and excellence, it became one of Beijing Hualian’s most golden periods. This leading retailer leveraged heightened consumer demand by expanding its presence across China. Today, it has footprints across the country’s business districts in Kunming, Hohhot and Hangzhou.
New World Development didn’t flounder in financial decline for long. With an increase of 35 per cent in 2020 and 22 per cent by the end of the year, it broke its own record in monthly sales.
Whilst the conglomerate’s sales figures grew amidst the pandemic, our internal research implies that it needs to expand its luxury portfolio further and invest more in understanding what will satisfy its high-end consumers. Remember, high-end purchasers need access to extravagant activities like shopping, eating, and the arts, just as proximity to other extravagant homes.
4. Hang Lung Properties
Hang Lung Properties has been continuously growing despite a worldwide strain in the economy. One of its key efforts to maintain growth is by collaborating with tenants to give consumers exclusive privileges and loyalty.
Plaza 66, one of its 11 malls located in Shanghai, has been the leader in the increase of its sales whilst the world is still experiencing a global pandemic. As recorded in its 2020 yearly report, the rental income of Plaza 66 hopped 34 per cent against 2019 levels, while retail deals flooded by 60 per cent for the year. By teaming up with tenants to give selective advantages to consumers, the respected property developer successfully strengthened customer loyalty.
5. The Wharf (Holdings) Limited
Wharf (Holdings) Limited is one of the most respected property developers in China. This year, it revealed an income increase of 7 per cent to HK$4,201 million by 2020 due to onshore, high-end spending.
“Demand for ultra-luxury properties remains robust, and the group’s Peak Portfolio stays at the top of wish lists for sophisticated buyers and tenants,” says Managing Director Stephen Tin Hoi NG.
One of its buildings, Changsha International Finance Square (IFS), gained the highest retail performance of 42 per cent. It has also managed to maintain the loyalty of its consumers towards them, especially high-end residents and visitors, with its 370 top-tier brands and a vast tenant portfolio from fine dining restaurants to recreational places and high-class entertainment.
So what is our takeaway here? Never lower your standard that has made you known in your niche.
Gia is an award-winning entrepreneur, marketing strategist and dog lover. Graduating with a degree in Marketing and the Media, Gia spent ten years working in the finance and insurance sector where she excelled in sales, data analysis and financial modelling.